Initially, developers will utilize the B.O.W.A.G. method or “big ole wild a–– guess” to plug rough sitework costs into the proforma. However, an example of how dangerous it is to use this method to make decisions to move forward on developing a piece of land estimating $100K per acre versus $200K per acre on say a 50 acre site. The risk of not doing the required due diligence can be costly.

Paris Projects initiates the Conceptual Sitework Budget Process by attempting to confirm or further clarify issues identified in the summary of findings and address cost concerns previously discussed in our Discovery Phase of involvement.

An amazing amount of information can be gathered by research based on experience and knowing the right people to call and asking the right questions.

If existing or the lack of public electric, gas, telephone or fiber optic utilities are a concern, Paris Projects identifies the specific engineer(s) responsible for the area where the project is located and discusses anticipated costs and schedules for specific issues. As an example, a previous project required the relocation of high voltage electrical transmission towers to accommodate the proposed new development. A cost $1M and nine months of delay to the project, impacted the developer because new towers had to be ordered delivered and installed. Another incident involved the rerouting of a 36 inch high pressure gas transmission pipelines was required on another project costing the developer $1M and took over a year to work through legal easements and deliver pipe to the site.

Paris Projects will contact geotechnical firms to discuss typical regional practices and concerns that affect grading costs. As a few examples, Virginia has CARSC geology or caves that may require bridging with concrete slabs. The mountains of North Carolina consist of very dense rock that almost always requires rock blasting similar to mining operations. Expansive soils in Oklahoma and Texas require lime stabilization operations for both paving and building slabs. In Florida, where the water table is very near to the surface of the ground, it requires the development to dig a utility trench for de-watering with temporary pumps and pipes. This added requirement can cost twice as much as the grading of the entire site. These are just a few examples of untold risks a developer may face on their project without expert advice from a company like Paris Projects.

Paris Projects works with Civil Engineers to quickly confirm if water or sewer is available near the site. We also provide insight on the local municipality projects and their official’s hot buttons and concerns. On one of our projects, a city would not allow pump stations, as they wanted no maintenance responsibilities, requiring the developer to install several miles of off site sewer lines. This necessitated the need for both Federal and State DOT permits to bore under a four lane Interstate Highway.

Site work contractors can help with current and local unit pricing costs for paving, utilities and grading.

Utilizing the developer’s “concept” plan or layout, Paris Projects will rough out utility layouts, paving fields, dirt quantities, etc. We apply rough unit prices to the proforma to develop an onsite and offsite conceptual site final cost.

The Conceptual Budget is continually refined as more and more definitive information is confirmed with the hiring of design consultants. We recommend that early in the process an environmental assessment be performed, which can cost up to $3,500 per execution. Records are searched and issues such as the existence of endangered species, Indian or slave burial grounds, petroleum plume migrations, etc. are identified early. Uncovering contaminated ground water and verifying the existence of asbestos in existing structures can reduce costs and risks to the developer.

Additionally, these studies of geotechnical borings can confirm subsurface rock on the property and grading quantities which may be needed.

Armed with years of experience and overcoming a vast variety of site specific issues and obstacles, Paris Projects can develop a Program Schedule and initiate the assemblage of a qualified site design team with the knowledge and depth needed to handle the requirements of each specific job.

Keith Paris
President
Paris Projects, Ltd.

Initially, the developer must evaluate if current landowners are willing to sell at a price that makes the deal work. This process alone can take months or years depending on the number of properties required for an assemblage and if the sellers are realistic and open to selling their property.

Concurrently, the existing land use for zoning classification must be verified to determine if a rezoning process will be required to allow the proposed new use. This prospect of a rezoning campaign cannot be taken lightly by the developer. Many projects have been derailed or killed because of neighborhood opposition, onerous city design guidelines or dislike of the proposed project by the community at large.

Once the developer is reasonably confident in his ability to buy and use the land for his intended purpose, he begins to plug very rough costs, income and profit estimates into a proforma or project budget. Experienced “rules of thumb” projections are utilized in the initial soft and hard costs proforma such as brokerage, leasing, design, legal, finance costs, property management fees, land, square footage building costs and projected rental income. Each and every site, however, is unique relative to physical characteristics and its conditions. This uncertainty relative to required work cost strikes fear in the heart of most developers and represents one of the highest risk aspects of any development.

All expenditures by the developer during the Discovery Process, called “pursuit costs”, are usually paid out of pocket and are at risk if the project does not move forward.

The initial analysis includes the review of readily available, no cost information such as existing boundary and TOPO surveys, aerial photography from various sources and public information from the municipal and state’s websites.

Existing surveys can be very helpful in establishing the general size and acreage of projects and can delineate existing easements and utilities that may require costly relocations such as high voltage stations or primary electrical services, high pressure gas mains, fiber optics, sewer mains and drainage features.

The lack of utilities near the site can also constitute a cost concern if offsite improvements are required to serve the site.

TOPO surveys or city websites indicate existing site characteristics and can provide the most crucial information for indentifying costly development concerns regarding the specific site. Drainage and creeks can affect the developable area if floodways exist. They can require expensive culvert or bridge crossing construction. The ultimate site plan layout, with sites that have water-draining issues, is to locate detention ponds on the low end of the site.

At Paris Projects, we take the Discovery Process very seriously to ensure that our clients move forward with their development decisions based on solid information and accurate proformas.

One of the highest compliments paid to our firm by a client is, “I utilize Paris Projects on all of my developments. It’s the most effective money spent for my piece of mind. I consider the hiring of Keith and his team at Paris Projects as simply buying an insurance policy against unforseen risks… dollars well spent”.

Keith Paris
President
Paris Projects, Ltd.

The decision to move forward with a new project is a huge balancing act and commitment of resources including time, talent and lots of money.

The initial Program Schedule prepared by Paris Projects provides the developer a general road map with critical milestones for major deadline needs to ensure the “timely” completion of the project.

The one thing to always remember when developing a Program Schedule is that TIME IS MONEY, however, our goal is to anticipate and optimize all the various schedule issues and minimize delay and needless costs.

Paris Projects (www.parisprojects.com), initiates the development of a Program Schedule with month durations to construct the various vertical buildings based on our 30 years of construction administration experience. We know that with retail, take McDonald’s as an example, a franchise can be flipping burgers 90 days after pad turnover, the corner drugstore takes 4 to 5 months to dispense prescriptions, a Lowe’s or Kohl’s will have a grand opening sale within 5 to 6 months, multiple retail Jr. boxes takes 7 to 8 months, a typical grocery store takes 9 months and a Target or JCPenney takes about 10 months from pad turnover to start selling clothing.

A building cannot commence until the GRADING is mostly completed and a structural building pad has been provided. We utilize our conceptual information gained during the due diligence phase to block out the Site Work Schedule. It is easy to allocate 2 to 4 weeks to install erosion control and set up benchmarks for GPS equipment. If the site is fully wooded, we calculate that 10 acres of timber clearing can occur per week. Stripping and stockpiling topsoil can start midway through the clearing process, however, many factors must be carefully considered when scheduling the grading durations.

A preliminary geotechnical investigation can indicate existing soil types and rock conditions. Sandy soils allow grading, as soon as, one day after a rain event; plastic and clay materials may require an additional 3 or 4 days of drying before grading can begin again.

A large amount of segmental retaining walls can slow down the rate of fill. Typically 30 days of settlement is required before building foundations can commence. Utilizing conceptual cut/fill quantities, we assume 10,000 cy to 20,000 cy per week can be achieved. Mass rock excavations can easily cut production rates in half. Grading during winter months can add another 30 to 45 days to the schedule due to weather events. Finally, we try to sequence the completion of fill operations at the larger/longer duration anchor stores first.

Water, sewer and public utilities may begin once rough finished grade is achieved, however, unique utility relocations like high voltage transmission lines, fiber optics and gas lines may require 6 to 9 months of prior coordination and design before the actual field work begins.

Underground site lighting, utility sleeves and landscape irrigation is sequenced into production prior to paving. Again, inclement winter weather can significantly delay final paving installations.

“Offsite” work is scheduled separately as it is not usually predicated by any “onsite” work. Considerable design and approval time allotment for DOT roadway and signal improvements must be addressed in the program schedule.

Next, we address the design and permitting durations which include boundary and TOPO surveys, geotechnical investigations, environmental and wetlands assessments, designs for grading, retaining walls, utilities, site lighting, paving, landscaping, irrigation, signage and vertical buildings and structures.

With larger projects, many times we start site work 6 to 9 months before the completion of the vertical building designs, to compress the overall project duration. By understanding which activities can occur simultaneously and which activities require predicated sequencing, we can develop an overall duration schedule based on “Critical Path” activities.

In retail development, we have to work around a “Black Out” period from November to March in which a retail tenant will usually not take delivery or attempt to open a new store. We look at our duration schedule to determine if we can deliver completed buildings and sitework before November or after March and, only then, do we tell the developer when we need to “START” and we can “FINISH” per the Program Schedule.

The design consultant and contractor prequalification is critical in building a TEAM that can perform per the Program Schedule.

Keith Paris
President
Paris Projects, Ltd.

When I graduated from Texas A&M with a degree in Building Construction back in 1981 we were in the midst of a recession. I interviewed with many companies but only found a job thru a friend on campus whose dad owned a constructions company in Dallas. I was so grateful to have my first job with a salary of $17,000 per year.

I worked diligently for the next  8 years with this company, highly trained in their corporate structure and culture. I was a huge profit center for the company, managing numerous projects when the savings and loan sparked recessions decimated the Texas economy.

The company paid me to stay home for a year while I sent out over 3,000 resumes locally with no takers. I finally came to the conclusion that I would have to pursue a job in other markets and at the time Florida, Baltimore, and Charlotte were active so my bride to be chose Charlotte. I researched the local business journal and sent my resume to the top ten developers in town and was hired by Trammell Crow/Childress Klein two weeks later in September of 1989.

After managing over two million square feet of new shopping centers, Charlotte experienced a mild recession in 1991 and as the lone construction manager with nothing to manage, I was laid off. Now with responsibilities of a wife, daughter and one on the way and a new house, I had to ponder selling our home at a huge loss and uprooting my family again. Sound familiar?

That is when I made the conscious decision to stay put in Charlotte and form my real estate development outsourcing consulting business. I locked myself in our spare bedroom, pulled out the yellow pages and started calling everyone in the book. At least everyone in Charlotte knew who I had worked for and were familiar with the prestigious projects I had managed. Now having managed a gabillion square feet of construction, I landed a small management contract to sub divide a developers large commercial tract with a new city street.

After a couple of months I moved out of the house into a Keyman suite with other small business / developer types where I secured the management of several Eckerd’s projects. I subsequently managed over 15 Eckerd projects throughout the southeast for multiple owners.

My biggest break was when I hooked up with a group of young , aggressive brokers who wanted to start their own retail development company. Both of our companies grew as they developed over 17 Target anchored shopping centers in the last 20 years all over the southeast and Oklahoma.

Now here we sit in Charlotte, NC , the epic center of the bank debacle , tanked property values, low consumer spending and the worst recession since the Great Depression.

The moral of my story:

• Rely on your friends and close acquaintances with opportunities
• If time is crucial to your existence, be prepared to consider different geographic markets. Texas, Louisiana and Oklahoma are doing much better than California, Florida, Phoenix and the east coast
• Utilize your  “combined” experiences to think outside your comfortable box for opportunities
• For me, diversification of the type of projects we managed is required. With retail shopping centers at a standstill we are looking at projects that do have financing such as Veterans Administration Outpatient Clinic, HUD medical and apartment projects, senior living / active adult developments , rehab projects and anything that may require site work.
• Maintain my Dad’s adage “The harder I work the lucky I am”.

Check out my website at www.parisprojects.com for our scope of services and some of our completed projects